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Amid high new-car prices, used-car consideration climbs

Monday, Apr. 15, 2019, 05:10 PM

By Joe OverbySenior Editor

ATLANTA -

NOTE: Updated to include March and first-quarter certified pre-owned vehicle sales figures.

Two years ago, 59% of vehicle shoppers were focused on used cars.

According to the 2019 Cox Automotive Car Buyer Journey study, that number is now 64% — and the struggle around new-vehicle affordability is a major reason why.

The numbers reflecting used-leaning shoppers include those that are either A) only shopping for used cars or B) those that are primarily shopping for used, but browsing some new.

The number of total shoppers only considering used has climbed from 23% to 28% in the last two years, according to the study.

(The consideration numbers included these categories: Used Only; Primarily Used, Some New; Primarily New, Some Used; and New Only. It excluded shoppers who were not sure).

In a news release recapping the study, Cox Automotive analysts said that, “consumers continue to be frustrated by new-vehicle prices and are more likely than ever to be shopping for used vehicles.”

And many are moving into certified pre-owned vehicles.

First quarter CPO sales were up 0.4% year-over-year at 677,038 units, according to Cox Automotive. In March, certified sales climbed 2.7% to 265,878 units.

Company analysts said in Wednesday’s Data Pointreport that record-high new-vehicle prices and the highest interest rates since 2011 are “perhaps” among the drivers of such CPO sales strength in Q1.

“This is in stark contrast to the weakness we have seen with new retail vehicle sales, which were down 4% for the quarter,” Cox Automotive analysts said in the Data Point report.

“As the used-vehicle market continues to see strong consumer demand with favorable supply of off-lease units coming to market, the CPO market is primed to continue its growth heading into the spring selling season.”

Going back to the Car Buyer Journey Study, new vehicles had an average purchase price point of $35,671 in December, Cox Automotive said, citing data from its Kelley Blue Book brand.

Monthly new-car loan payments averaged $567 in the first quarter, a 3.4% year-over-year hike. New-car lease payments were at $500, up 2.7%.

There was relatively stability in monthly used-car payments, which came in at $414 — just $1 more than the year-ago figure.

This underscores Cox Automotive’s finding that affordability is paramount. More than half (54 percent) of vehicles in 2012 had price tags under $30,000, but that has slipped to just a little more than a third (35 percent) falling into this price bracket, the company said.

“Meanwhile, the number of vehicles priced over $50,000 jumped fourfold, from 6% in 2012 to 24% today,” analysts said. “It comes as no surprise then that 48% of consumers feel that owning or leasing a vehicle is becoming too expensive, up from 42% in 2015.”

Used-car buyers are also cutting down on the time they spend shopping — and more so than their new-car counterparts.

Among what Cox Automotive called “Automotive Internet Users,” or AIUs, used-vehicle buyers reduced their time spent researching and shopping from 15 hours and seven minutes in 2017 to 14 hours and 12 minutes in 2019.

That’s a 55-minute reduction.

Meanwhile, new-vehicle buyers cut their research/shopping time by 42 minutes, spending 13 hours and six minutes on that process in 2019.

However, the amount of time dedicated online has remained relatively steady for both new- and used-car shoppers (among AIUs)

For used-car buyers, 63% of their shopping time was spent online, representing a sum of eight hours and 52 minutes. Two years ago, they spent 59% of their time online (which still equaled eight hours and 52 minutes).

On the new-car side, 53% (or six hours and 55 minutes) of time was spent online in 2019; two years ago, it was 52% (or seven hours and eight minutes).